Council / Tourist tax ‘not the answer’ as councillors decide against adopting levy
COUNCILLORS have formally decided against adopting a visitor levy in Shetland, with the focus instead placed on engaging with the Scottish Government on alternative revenue-generating avenues.
Elected members made the decision at a meeting of Shetland Islands Council’s (SIC) policy and resources committee on Monday after consultants carried out a feasibility study on the so-called tourist tax.
Leader Emma Macdonald said that for her a visitor levy “just isn’t the answer, and doesn’t make sense in our context”.
A report to councillors said the “risks outweigh the benefits”, with the administrative burden on accommodation providers a key worry as well as the potential impact on visitor numbers.
Under new legislation in Scotland, councils now have the power to introduce a levy on overnight stays, which would allow them to raise additional income. Similar levies are in place elsewhere in the world, including in some European cities.
The aim is to generate revenue to develop, support or sustain facilities and services which are substantially for, or used by, people visiting the area for leisure or business purposes.
However a report said despite Shetland’s busy tourism industry if 30 per cent of people were exempt, a five per cent levy was projected to generate less than £1 million over a ten-year period.
Earlier this year the councils in Shetland, Orkney and the Western Isles appointed a consultant to investigate the feasibility of a visitor levy scheme for each of the three areas.
The report to councillors said feedback from the engagement exercise showed that alternative forms of revenue generation, including point of entry and cruise levies, were considered to be “potentially be more favourable”.
The Scottish Government recently consulted on the idea of a separate levy on the cruise ship sector, but no decisions have been made yet.
The item on Monday’s meeting went straight to debate without any questions from members.
Both leader Macdonald and her depute Gary Robinson spoke out against the visitor levy.
Macdonald said there was potentially merit in a point of entry or cruise ship levy, but said the visitor levy does not make sense for Shetland.
Robinson said he felt the process had come to a “natural conclusion” and added that to him the levy seemed like something invented to solve visitor economy issues in Edinburgh.
The high costs for visitors getting to Shetland in the first place was also mentioned.
Robinson added that if first minister John Swinney was keen on more autonomy for Shetland then a good start would be with letting the local authority take its own decisions on income generation matters like the levy.
He also said the reality was that the recent increase in NorthLink ferry fares would itself probably generate more income than the levy would.
Meanwhile North Isles member Robert Thomson said he has had representations from local businesses who were not in favour of the scheme.
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